Futures Education

The Contract

Futures are simply contracts, or obligations, to buy or sell an underlying product, or commodity, at some point in the future at a price agreed upon today. As time passes, the value of a futures contract increases or decreases relative to the cash price of the underlying commodity.

The early days of the futures industry were quite inefficient and chaotic. The problem was the lack of structure to the forward contracts that were bought and sold. If it were that way today, you would find lawyers and appraisers sitting along the sides of the exchange. The lawyers would carefully review every contract to determine what was being bought or sold, how much, and when delivery was to take place. In general, the attorney would make sure the contract was legitimate. After getting through the attorneys, the contract would then have to go to an appraiser to put a value to the contract. The appraiser would have a list of all the contracts that had been bought or sold in the past, and would find a similar one to provide an appraisal of the contract. Then you could take the contract and try to find a buyer or seller, who would take the opposite side.

Fortunately, those days are in the past and we have a wonderful system of standardization that makes futures trading much simpler! Standardization is to futures as traffic laws are to roads, providing structure and rules so we can quickly and efficiently navigate the industry. Standardization makes futures contracts easy to trade. Trading futures is like exchanging apples for apples. They are standardized as to terms of the contract such as the quantity and grade of commodity that is acceptable and when and where it can be delivered.

Let's go through some general points of a futures contract.

Obligation to Buy or Sell

Similar to stock options, there are two parties associated with each contract: the buyer and the seller. Unlike stock options, however, where the seller has an obligation and the buyer does NOT, futures contracts obligate both the buyer and the seller. The seller has an obligation to deliver a specific amount of product at a set time in the future. The buyer has an obligation to take delivery and pay for the product. The key word is "obligation."

Nobody likes the word obligation, and chances are you have now toned down your enthusiasm. However, these obligations kick in only when you don't close out, or offset, your position before expiration. Long before the truckloads of pork bellies are delivered to your doorstep, speculators, like you and I, will offset the position. This simply means that if you bought one contract of pork bellies, you "offset" your position by selling one contract of pork bellies. In math terms it looks like this: +1 -1 = 0. No delivery - as long as you do it before expiration!

At this point everyone asks, "What happens if I forget and don't offset before expiration, will I get a truckload of pork bellies?" The answer is always no! First of all, no one is going to deliver commodities without a whole lot of paperwork and mutual consent. Second, your broker has systems in place to avoid such predicaments. Your broker will simply "roll" you over into the next expiration - this is done by selling your expiring contract and buying a new longer-term contract. Or, your broker may just offset your position, leaving you flat. This is one of those "fine print" points you will want to follow up on with your broker. Less than 2% of all futures contracts are actually delivered - and 99% of those are for commercial use!

The Underlying Product or Commodity

The word commodity is defined very broadly to include underlying products such as physical commodities, financial instruments, foreign currencies or stock indexes. As mentioned before, commodities are standardized in two ways: the quantity and grade or quality.

Every futures contract specifies a certain quantity of the commodity. For example, one CME Euro FX contract represents 125,000 Euro. CBOT Soybean contracts are for 5,000 bushels of soybeans. The COMEX gold contract represents 100 troy ounces. This type of standardization makes it possible for buyers and sellers to know exactly how much of a commodity they are trading.

Another aspect of commodity futures contracts that is standardized is the quality of the underlying commodity. For example, silver contracts represent 5,000 troy ounces of 99.99% pure silver in ingot form. Crude Oil traded on the New York Mercantile is 1,000 barrels of light sweet crude (a specific grade of U.S. oil). There is also a Brent sweet crude contract which is an entirely different grade of oil.

Whether it's a silver or currency futures contract, you know exactly how much and what grade of commodity you are trading.

Price

Price is the only variable when it comes to futures contracts. When you buy a futures contract, you agree to buy the underlying commodity at a price traded today for future delivery. By putting money down on the contract, you lock in the price.

This will be better understood with an example.

Suppose you own a small regional airplane business. You are afraid that oil prices will skyrocket in the near future. You are currently paying $2.00 a gallon for gas, a by-product of crude oil, and it would sure be nice to lock in that price for the next six months.

You can - sort of. You go to the futures market and buy a crude oil futures contract that expires in six months. The price you pay for the crude oil futures contract will be at or very near today's crude oil price of $60 a barrel.

Over time it turns out you were correct in your speculation of oil prices. In three months, oil has increased to over $70 a barrel. The price you are paying at the pump to fill your plane has increased from $2 to $2.50, so you are losing money every time you fill the airplane. However, the value of your futures contract has increased and now you can sell it for $70 a barrel - making over $10 on 1,000 barrels of oil! With the profits made in the oil futures, you more than covered the increase in the price of gasoline.

There is often confusion when it comes to the differences between futures and equity options. Both are contractual agreements between a buyer and seller. Both define the quantity of the underlying product. The difference comes in how they specify price. Option contracts lock in a future price for delivery; in other words, you determine what price you want to pay in the future and pay a premium today for the right to buy the product in the future at the strike (pre-determined) price. Futures are different. Futures lock in today's price for future delivery.

Let's go back to our example of the airline company.

There is a difference between how options and futures traders would structure the same objective. The options trader would say, "I want to buy crude oil in the future at $58 a barrel." The options trader would choose an option that expires in 6 months with a $58 strike price, and pay a premium of $4 for the contract. If the price of crude oil goes up to $70, the option would be worth $12 minus the original premium of $4. In other words, the option would be worth $8 a barrel.

One big difference between options and futures, however, is how the contracts are valued at expiration. If, at expiration, the option is at or out of the money, there is no value left in the option. If a futures contract is lower than your original price, however, there is still value in the contract.

Back to the airline example:

What happens if crude oil dropped to $57 a barrel? The options trader's position is completely worthless - the option is out of the money.

The futures contract, on the other hand, still has value - albeit a loss. If the price of the contract is $57 a barrel and the futures trader paid $60 a barrel, the futures trader is losing $3 a barrel on a 1,000-barrel futures contract.

The only similarity between a futures contract and an options contract is that they both have an expiration date. But a futures contract does not "waste away" like an options contract.

The futures markets exist for the purposes of price discovery (speculation) and the transference of risk (hedging.) They are an excellent way to express your own opinion about where the price of a commodity is heading.

Expiration

Like options, futures contracts expire at a certain date in the future. For example, a June 2009 futures contract will expire sometime during the month of June in 2009 (depending on exchange rules). As with other elements of the contract, a standardized expiration date makes it easier for investors to focus solely on price discovery.

The Underlying Commodity

The futures market is growing in popularity as a financial instrument, as well as in the number of products offered. More than just a wheat and barley market, futures now include underlying products such as interest rates, energy, currencies, equity indexes, metals and more.

Due to the incredible growth, and in an attempt to keep the industry organized, the futures industry has divided futures into three broad categories: Commodities (including Ags and Metals), Financial, and Equities. These broad classifications are broken down into subgroups in much the same way the equities market breaks industries like retail down to industry groups like apparel.

In this section we cover the three broad classifications of futures and break them down into their smaller subgroups.

Commodity Futures

The term commodity can be confusing to new futures traders. The futures market is often referred to as a commodities market. The underlying product can also be generically referred to as a commodity. For example, "commodity trading advisor" is used to define an individual or firm who operates a managed futures program, even though many of them trade exclusively in the financial futures markets such as interest rates or stock indexes.

More specifically, commodities are known as physical assets. They include natural resources, chemicals and physical products you can touch, taste, smell, grow, mine, consume or deliver. Corn, gold, crude oil and coffee are all commodities.

The most popular commodity futures can be broken down into several subgroups: metals, energy, grains, livestock, and food and fiber.

Metals As one of the most fundamental building blocks of an economy, metals are used in myriad ways to support many different industries, from construction to production and financial to retail. The major metals futures contracts include copper, gold, platinum, palladium and silver. Many factors, including supply and demand, geopolitical and economic policy, affect the price of metals. As a general rule, metals are listed primarily on the New York Mercantile Exchange and through the Globex electronic exchange.

Energy

Given the world's appetite for oil, energy futures can be an exciting place to trade. The most popular energy futures include crude oil, RBOB gasoline, heating oil and natural gas. These natural resource markets have become one of the most important gauges of world economic and political developments, and are therefore heavily influenced by disruptions in energy-producing nations. Energy futures are also traded on the New York Mercantile Exchange and Globex.

Grains

Grains and soybeans are essential to food and feed supplies. The major futures contracts in this category are corn, soybeans, soybean oil, soybean meal and wheat. Grain prices are especially sensitive to weather conditions in growing areas at key times during a crop's development, as well as economic conditions that affect demand. Reports from the U.S. Department of Agriculture are closely watched, summarizing key factors influencing supply and demand including current production and carryover supply from the prior season. Grain commodities are generally traded on the Chicago Board of Trade, Kansas City Board of Trade, and Minneapolis Grain Exchange.

Livestock

Commodity futures on live cattle, feeder cattle, lean hogs and pork bellies are another class of commodities. Their prices are affected by consumer demand, competing protein sources, price of feed, and factors that influence the number of animals born and sent to market, such as disease and weather. Livestock futures are generally traded on the Chicago Mercantile Exchange.

Food and Fiber

If you've ever watched the movie "Trading Places" you'll be familiar with this class of commodities, which includes cocoa, coffee, cotton, sugar and the ever infamous frozen concentrated orange juice. In addition to global consumer demand, the usual growing factors such as disease, insects and drought affect prices for all of these commodities. International exchange rates affect all of these global products, as well as factors like tariffs and geopolitical events in producing nations. These markets are traded at the New York Mercantile Exchange and ICE.

Financial Futures

Financial futures are futures contracts where the underlying products are financial instruments such as interest rates or equity (stock) indexes. Like all futures markets, a financial futures contract specifies an exact quantity of the underlying financial instrument at a market-determined price that can be settled via cash or physical delivery, depending on the instrument.

Financial futures were developed amid a rapidly growing trend toward globalization in the world's economic landscape starting in the early 1970s. They were designed to meet new needs and risks that businesses, governments, and individuals faced amid changing capital flows. Even though they have a shorter history than agricultural futures, they now dominate the exchange-traded product offerings. Today, the majority of activity in futures globally takes place in contracts on financial investments, and futures exchanges are continually on the lookout for new successes in this category.

Financial futures fall into two subgroups: interest rates and equity indexes.

Interest Rates

As the hub of all economic and financial performance, interest rates have become an increasingly more important factor in the U.S. financial system. Interest rate futures products encompass a range of short-term instruments, such as the Federal funds rate (an overnight inter-bank lending rate), and long-term products, such as the 30-year U.S. Treasury bond.

Equity Indexes

Recent years have brought a surge of interest in equity index futures as an alternative investment choice to exchange traded funds, and equity index options. Stock index futures contracts were introduced in the United States in 1982, nine years after listed options investing began at the Chicago Board Options Exchange, the securities offshoot of the Chicago Board of Trade. Interestingly, the CBOT had come up with the idea of futures on stocks as a way to diversify its product line, although futures on individual stocks were many more years in coming. However, shortly thereafter, the Chicago Mercantile Exchange introduced the S&P 500 index, which quickly became the market leader and continues to dominate U.S. stock index futures trading today. A number of stock index futures and options contracts are now available to futures traders, covering all areas of the market. The most popular major index futures contracts include the S&P 500 Index, the Nasdaq 100 Index, the Dow Jones Industrial Average, ISE Sector Indexes, and Volatility futures.

Single Stock Futures

Single-stock futures combine the best elements of two popular and useful financial investments–futures trading and stock investing. SSF's can be used as speculative or hedging vehicles with unique characteristics and potential benefits, and provide an alternate method for financing equity transactions.

Currency Futures

When it comes to international investing, investment managers, corporations and private investors trade currency futures, also known as foreign exchange, forex or simply FX, to manage the risks and capture potential opportunities associated with forex rate fluctuations.

When trading currency you don't actually trade one currency, but a pair based on the relationship between the two. For example, if you wanted to buy Euro, then you would sell or give up your dollars and buy Euro. You would profit if the dollar weakens and the Euro strengthens. A number of factors go into determining the "strength" or "weakness" of a currency versus another, but it usually comes down to comparing the economy of one nation to that of another. Generally, expanding economies have stronger currencies, while recessionary economies have weaker currencies.

As you can see the futures market is enormous. Don't get overwhelmed though. There are more stocks than there are futures and you seem to get by just fine. Most futures traders will specialize in one area or another. The adage "Jack of all Trades, Master of None" isn't a description of a futures trader! One key to futures success is knowing as much as possible about the underlying commodity.

Symbols

In order to understand the futures markets, it is essential to become familiar with basic terminology and operations. While trading rules and procedures at each futures exchange vary slightly, terms tend to be used consistently by all U.S. exchanges - especially when it comes how each futures contract is identified.

All futures contracts are assigned a unique one or two-letter code that identifies the contract and the underlying commodity. This abbreviation, or ticker symbol, is used by the clearing platforms to process all transactions. For instance, the symbol for the Dow future is DJ, while the symbol for the mini-sized Dow future is YM. This symbol is important when you trade electronically because if you enter the wrong symbol, you could trade the wrong contract.

In addition to the contract code, you also need to know the expiration month and year code. For instance, the month code for March is H. So if you were trading the March Dow future in 2009 the code would be DJ H9.

To find a futures symbol take 1) commodity root 2) letter for month 3) last digit for year. Here is a list of the month codes for your convenience: (globex)

F = January	K = May	U(P) = September
G = February	M(I) = June	V = October
H(C) = March	N = July	X =November
J = April	Q = August	Z(T) = December

Before you trade, be sure to contact your broker to make sure you have the right symbols, since different platforms and brokerages may vary slightly in how to enter them into their computer systems.

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Futures Education

Strategies using Single Stock Futures

The most common use of single stock futures in trading is speculation. However, single stock futures can be bought and sold for myriad reasons and in different combinations to meet different objectives. The following describes just a few of the trading strategies used by single stock futures traders:

Long SSF Trade

In this trade, your objective is to profit from a price increase in the underlying stock.

Short SSF Trade

Here, your objective is to profit from a price decrease in the underlying stock.

SSF Relative Strength Trade

In the relative strength trade, you hope to profit from one stock's price performance relative to another stock's price performance.

SSF Short Hedge

In this trade you use single stock futures to protect a long stock position against the risk of downward price movement.

SSF Long Hedge

A long hedge in single stock futures allows you to set the purchase price of a long stock position today - even though you won't actually buy the stock for days or weeks.

SSF Portfolio Hedge

You can temporarily alter your portfolio's composition without having to acquire or liquidate shares of stock.

SSF Arbitrage

Arbitrageurs profit from imbalances and inefficiencies between the stock price and the single stock futures price.

SSF and Equity Option Combinations

Many single stock futures traders actually combine SSF's with equity options to create investments with unique risk and reward characteristics.
Before you begin to trade any of these strategies remember, heed these words of caution:
You may notice that each strategy listed above has a specific objective and motivation. It is important when trading single stock futures that you use the right strategy for the right purpose. The consequences can be dire if you make a mistake and use a hedging strategy for speculative purpose, or if you use an arbitrage strategy for a speculative purposes. Before you trade, make sure you understand your setup and use the appropriate strategy.
Another common challenge is the tendency to change strategies in the middle of a trade. Successful traders set a plan and trade their plan. The market has a knack for enticing you to change your mind. Do not fall for this trickery!
Finally, by no means is this a complete list of strategies used by single stock futures traders. These are simply the most common strategies. You can, for example, increase the level of complexity significantly when you start combing SSF's with equity options or if you use SSF's to manage portfolio risk. However, these are topics for a later time.
Let's start out with the most simple and straightforward use of single stock futures: the Long SSF Trade.

Long SSF Trade

The long SSF trade is the most simple of all the strategies using single stock futures. It is akin to buying stock outright in terms of analysis and objective. You want a stock that is in an uptrend. You want to buy the SSF at support and sell at resistance. If the stock increases in value, your contract will increase in value - dollar for dollar. The risk, of course, is that a stock price decrease will result in a dollar-for-dollar loss.

Example

Stock ABC is priced at $50 a share and you expect it to increase. You purchase a 100-share May futures contract at a price of $50.00 a share. Assuming the required initial margin deposit is 20%, your initial outlay is $1,000. Your gain or loss will depend on what happens to the futures price.

If the futures price when the contract is sold is $45, then you have a loss of $500 on the futures contract.
If the futures price when the contract is sold is $50, then you break even on the futures contract.
If the futures price when the contract is sold is $55, then you have a gain of $500 on the futures contract.

You will notice that you make money when the stock price goes up and you lose money when the stock price goes down. This is the same risk structure as buying the stock. If you buy stock and the stock goes up, you make money. If you buy stock and the stock goes down you lose money. There is really no difference between buying the stock and purchasing the SSF except in your capital outlay.

The Short SSF Trade

If your forecast for a particular stock is gloomy, you can initiate a short SSF trade by selling the stock's SSF. As the stock price drops to your target, you can then offset your short position by purchasing a similar contract with the same expiration.
In many ways, a short single stock future position can be less cumbersome and usually less expensive than establishing a short position in the stock itself (i.e., by acquiring and selling shares of borrowed stock). There are no complicated short selling rules to worry about and you don't have to pay interest on the borrowed stock.
Your decision to sell a SSF may also be influenced by general stock market conditions. If the markets are falling fast, your broker may not be able to accommodate a short stock sale for your account due to a rule in the stock market that forbids short sales without first having a move higher. This is called the uptick rule and it can limit your profitability in the bearish stock market. The good news is that there is no uptick rule in single stock futures.
Furthermore, short futures positions do not require your broker to locate and borrow the underlying stock prior to execution. They simply sell your single stock futures contract - after all, you've put up a good faith deposit letting them know you'll fulfill your end of the contract or at least offset it before it expires. Whereas buyers of futures contracts seek to benefit from price increases, sellers of futures contracts seek to benefit from price decreases and stand to incur losses if the futures price rises rather than falls.

Example

In January the price of XYZ stock is $50 a share and the May futures price is $50.00. Expecting the price to decline, you sell a 100-share futures contract at $50.00 and make a margin deposit of $1,000.

• If the futures price when the contract is bought is $45, then you have a gain of $500 profit on the 100-share futures contract.
• If the futures price when the contract is bought is $50, then you break even on the 100-share futures contract.
• If the futures price when the contract is bought is $60, then you have a $1000 loss on the 100-share futures contract.

The Short SSF trade is a great alternative to short selling and can provide a great way to make money in a bear market.

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Futures Education

What Are Futures?

Welcome to the futures market - and relax - it's not as complicated as you might think!
The futures market can provide opportunities that other financial markets simply cannot offer. If you were to write down the perfect investment, it would probably go something like this. I wish I could invest in:

I wish I could invest in:

• A product that would always be in high demand.
• Something that can't be ruined by a greedy CEO and Board of Directors.
• Something that would move enough to make lots of money every day.
• Something where I didn't have to put very much money down but could still make a huge return!
• Something I could buy or sell whenever I wanted - not just 9-5pm!
• Something that would always go up in value.

Yes, we have seen this wish list before, and we have some good news for you and some bad. The bad first. Unfortunately, such an investment does not exist - it's the always going up part that ruins it every time. The good news is that there is an investment that comes pretty close: futures!
The futures market provides unparalleled access to the most basic and in-demand products in the world. Among the many investment opportunities in the futures market are commodities such as gold, oil, wheat, and orange juice (these are the kinds of products that are always in demand!). It also includes currencies such as the US Dollar, British Pound, and Japanese Yen (also high demand!). It also includes financial market indexes such as the Dow Jones Industrial Average, Nasdaq Composite, and the S&P 500 (again high demand!).
When you trade the stock market, you have a lot to consider in terms of who is running a company, what the company offers, whether the product or service has longevity, how the company performs in different economic cycles, etc.
In the futures market, you deal with the world's most basic and fundamental products. Rather than worrying about who is running a particular aluminum company or whether they will be in business next year, you can just buy aluminum - with a level of comfort knowing there is always a market and use for aluminum.
Every day, banks deposit and lend money to customers. Instead of finding a bank with a strong fundamental balance sheet and solid management, why not invest in the product a bank makes its living from - currency. As you may be aware from recent world events, the values of currencies are constantly fluctuating, creating the opportunity to make money from the ever-changing value of money.
When it comes to success, mutual fund managers have one major challenge in life - to provide a better return than the market index. Some are successful, while others fail. Market indexes provide a baseline or fundamental benchmark for performance in the financial world. You could give your money to a money manager and give them a crack at outperforming the markets - or you could just invest in the over 25 different index futures! Chances are good that these indexes will still be ticking when your money manager has come and gone!
In addition to these advantages, futures have many other benefits over other financial instruments, including:

Leverage

Futures are one of the most efficient investment vehicles in existence. What do we mean? Simply stated, with futures you can make a large investment with a small amount of money. This concept is known as "leverage." Leverage can be a boon to investors on the winning side of the market, as gains can be greater with futures than with other investments (this is how you invest in something that doesn't require a lot of money but still has upside potential). However, leverage can be a double-edged sword, inflicting a lot of pain if you are on the losing side of the trade.

Diversification

With leverage, a little bit of money goes a long way. This means that excess funds in your account could be used for other purposes, including investing in other assets. Diversification is a good thing when it comes to investing since it helps to average things out! Portfolio diversification is something we will cover in detail later in the course.

Volatility

Futures are known for their considerable price movement, which is another key benefit. Like leverage, volatility can work for or against you. However, most traders want markets that move - and futures move! Just take a look at where the price of crude oil has gone over the last year, and you'll see what we mean (didn't you want an investment that moves enough to make lots of money every day?).

Trading Hours

Most futures markets today trade around the clock. It's easy to get in and out of positions in popular and liquid futures markets, and you can do so at the click of a button, with lightning-fast speed. Futures markets are investor-friendly, and that has helped drive the incredible growth these markets have experienced in recent years.

Tax Benefits

Not only do investors like futures, the IRS smiles favorably on this market as well. Futures enjoy unique tax treatment not available to the equities market. Generally, securities transactions are taxed as either short-term capital gains, or more favorably as long-term capital gains. Futures transactions, however, are simply lumped together and reported on a single Form 1099 at year-end. Profits are then taxed at the "60/40" rate - 60 percent taxed at the favorable long-term rate and 40 percent taxed at the short-term rate. We're not tax advisors, so please consult your tax specialist about your individual circumstances.

Information

In the futures market, supply and demand form the basis of price direction - not quarterly earnings, corporate filings or management changes. Instead, the data that moves futures markets often comes from government reports that are found in the public domain. For example, the U.S. Department of Agriculture estimates crop sizes and international demand for wheat, corn and soybeans. The economy also plays an important role in futures pricing, and most economic reports are also public domain and come from central banks and various government agencies.

Not a Whole New World

Unfortunately, many people have never heard of futures trading or, worse, they have heard of futures and the stories have not been pretty. Put the horror stories aside for a moment and consider this: every time you invest you assume some level of risk. Futures are no exception. You can and many people do lose money investing in futures. However, just like any risky venture, there are steps you can take to minimize your risk.
First and foremost, if you have ever traded stocks or options, you'll want to keep in mind what you have learned related to risk, portfolio management, discipline and emotional control. In fact, many of the concepts and knowledge you have gained trading stocks and options will translate nicely to futures. Concepts such as long and short, order types, margin, etc. all have similarities to futures trading.
Another similarity between equities and futures trading is the fundamental objective. When buying stocks or options, your objective is to buy when prices are low and sell when prices are high. This is the same objective in the futures market. There are some twists in "how" to buy low and sell high, but the objective is the same (the twists will be explained in greater detail in Module 3).
Futures traders are also able to build on the skills they have learned trading stocks and options. Concepts such as discipline, trading plan, psychology, etc. all play a role in your success as a futures trader.
A review of the characteristics of successful futures traders reveals three common factors that have more influence on their success than any other:

• Financial Resources
• Knowledge
• Discipline

The futures market can be risky, but people just like you are able to manage the risk and find success trading futures. How do they do it?

Financial Resources

First, they have money. More specifically, they have enough money to stay in the markets long enough to make money. Experienced traders will try to get specific and tell you that you need $10,000 to $30,000 to get started. Rather than giving a specific dollar figure, it is important to understand why futures traders need significant financial resources to be successful.
Most futures traders will experience a drawdown - a streak of losing trades that reduces the capital in one's trading account. Your account must be large enough to withstand the inevitable drawdown. Drawdowns are perfectly correlated to the amount of risk you take on each trade. If you are swinging for the fences, you'll have larger drawdowns. If you are looking for small but consistent profits, you will have smaller drawdowns.

Knowledge

The second characteristic of successful futures traders is their trading plan. Rooted in sound financial principles, your trading plan should be simple to follow, simple to understand and simple to implement. If you were to survey the country's most successful futures traders, you would discover that they all use different strategies; in other words each trader has his or her own unique trading plan. A successful trading plan helps you identify a competitive edge in the markets. You will also notice that each trading plan has its own set of flaws. A successful trader's plan should include detailed instructions to compensate for these shortfalls.
Unfortunately, this type of trading plan is not created overnight. There are ample resources available to help you get started creating a simple trading plan (optionsXpress has a repository of professional lectures, forums, and discussions with ideas that will help you). However, the success of your plan depends on refinement. It is refined with time. It is refined with experience. It is refined with knowledge. When you first delve into the futures market, your trading plan must make accommodations for the acquisition of experience and knowledge over time. Time is needed to get over the learning curve. Experience is needed to learn the intricacies of the futures market. Knowledge is needed to understand the definitions, structure and boundaries of the futures market.

Discipline

Finally, if you don't have the discipline to manage your trades according to plan, you won't last very long in the futures market. They say that pride precedes the fall and nowhere is that more true than in the futures market. Your trading plan helps you keep your trading objective. When you fail to use discipline, your trading becomes subjective without rhyme or reason. It will be difficult for you to improve your trading success if every decision you make is according to your whims, passion and emotion. Historically, people who experience large drawdowns in futures do so because of feelings, opinions and not admitting or believing they might be wrong.

Disciplined traders are aware of the following emotional pitfalls and seek to avoid them:

• Trading for the thrill of it
• Trading to make back lost money
• Lack of money management
• Lack of a defined trading plan
• Inability to admit mistakes

Your success in the futures markets has as much to do with your financial, intellectual and emotional preparation as it does with your execution. This course will help you prepare to trade futures, but you will also need to work on preparing yourself in these other ways as well.

The Investor Life Cycle

For many of the reasons we have already mentioned, over time, traders naturally gravitate to the futures market. In fact there is a growth cycle most investors go through as they develop knowledge and understanding of the financial markets.
First investors look toward mutual funds to provide growth and financial independence. For the daring few who choose to progress beyond the mutual funds, they seek the financial returns of the stock market. Traders will generally cut their teeth in this exciting financial market for 2-3 years when they naturally gravitate to the derivatives or options market. Those traders who endure the learning curve of the options market tend find a home in the futures market some 5-7 years into their trading career.
Today, however, investors are trumping the learning curve and short-circuiting the time curve to discover the wonderful opportunities that are available in the futures market much sooner - and for good reason, too.
Today's futures markets have grown beyond the traditional commodities market of yesterday. Today, grains, gold and oil have yielded ground to a broader range of instruments including stocks, indexes, currencies and even carbon emissions futures! Today's futures markets have grown beyond the boundaries of American borders to include a global financial market; futures trading in England, Germany, Japan and Australia has exploded as new global trading networks have evolved.
But what does this mean for you? Traditionally, the futures market was for that elite class of traders with RISK tattooed across the bicep. To set your stress at ease, today's futures trading has made huge strides away from that stigma. Today, new products are being released with variable definitions, sizes, multipliers, etc. You can purchase "mini" futures that reduce your exposure to risk and make investing more palatable.

Who's in charge of the Futures Market?

Like the stock market, the futures market is a highly regulated industry offering excellent protection to individual investors like yourself. Companies or individuals who handle futures money or give futures trading advice must apply for registration through the National Futures Association, a self-regulatory organization approved by the U.S. Commodity Futures Trading Commission, or CFTC.
In 1974, Congress created the CFTC as an independent pseudo-governmental agency with the mandate to regulate commodity futures and options markets in the United States.
When the CFTC was created, the majority of futures trading took place in the agricultural sector, which is why this industry is often referred to as the "commodities" industry. Today, the futures industry has become increasingly varied to encompass a vast array of highly diverse specialties including agriculture, metals, consumer staples, currencies, financial indexes, stock equities, and more.
The CFTC assures the economic utility of the futures markets by encouraging competitiveness and efficiency, protecting market participants against fraud, manipulation, abusive trading practices, and by ensuring the financial integrity of the clearing process. Through effective oversight, the CFTC enables the futures markets to serve the important function of providing a means for price discovery and offsetting price risk.
The CFTC's mission is to protect market users and the public from fraud, manipulation, and abusive practices related to the purchase and sale of commodity and financial futures and options, and to foster open, competitive, and financially sound futures and futures options markets.

The CFTC seeks to protect customers by:

• requiring companies and individuals to disclose market risks and past performance information to prospective customers,
• requiring that customer funds be kept in accounts separate from those maintained by the firm for its own use, and
• requiring customer accounts to be adjusted to reflect the current market value at the close of trading each day.

The CFTC also monitors registrant supervision systems, internal controls, and sales practice compliance programs.
In addition to federally mandated regulation offered by the CFTC, the futures industry also self-regulates through the National Futures Association, or NFA. The NFA develops rules, programs and services that safeguard market integrity, protect investors and help firms and representatives meet the CFTC's regulatory standards.
In today's global financial markets, it is important to identify companies that are registered with the NFA and instruments that are created and managed under the CFTC's jurisdiction. The global financial markets have literally opened access to a whole new set of challenges related to regulating the global futures market.

Dispute Resolution

If you have a dispute arising out of your commodity futures or options account, first try to resolve the problem with your broker and his or her supervisor at the firm that employs or guarantees the broker.

If that fails, commodity futures customers have several options for resolving disputes:

• The CFTC Reparations program
• NFA sponsored arbitration
• Civil court litigation

In selecting a particular approach, you may want to consider the cost, length of time involved, and whether or not the assistance of an attorney is required.

Where are futures traded?

Futures, like stocks, are traded on exchanges. A commodity exchange is an organized market where traders meet to buy or sell various futures contracts. The exchange may be a physical location, like the Chicago Mercantile Exchange, or it may be an electronic gathering place such as GLOBEX. Either way, the exchange acts as an important part of the futures industry by:

• Providing an organized location (physical or electronic) for trading futures
• Regulating the trading practices of their members
• Gathering and transmitting price information
• Gathering and governing commodities traded on the exchange
• Supervising warehouses that store the underlying commodities
• Providing a means for settling disputes between members

History of the Futures Market

It is helpful to begin a discussion on the futures market with a historical sketch. Commodity markets have existed for centuries around the world because producers and buyers of commodities, such as rice, wheat, oil and other items have needed a centralized place to trade. In those days, cash transactions were most common, but occasionally a "forward" type arrangement was also made - deals to deliver and pay for something in the future at a price agreed upon in the present. There are records, for example, of "forward" agreements related to the rice markets in seventeenth century Japan; most scholars agree that forward arrangements actually date back much farther in time.
The immediate predecessors of futures contracts were "to arrive" contracts. These were simple agreements to purchase designated goods when they arrived by ship, and they were used for centuries when shipping was the primary mode of international trade.
The first organized grain futures trading in the U.S. began in places such as New York City and Buffalo, but the development of "modern" futures, which are a unique type of forward agreement, began in Chicago in the 1840s. With the construction of the railroads, Chicago began to emerge as a center for transportation between Midwestern producers and East Coast population centers. The city was a natural hub for trade, but the trading that took place was inefficient and unorganized until a group of Chicago-based businessmen formed the Board of Trade of the City of Chicago in 1848. The Board was a member-owned organization that offered a centralized location for cash trading a variety of goods, as well as trading of forward contracts. Members served as brokers who facilitated trading in return for commissions.
As trading of forward contracts increased, the Board decided that standardizing those contracts would streamline the trading and delivery processes. Instead of individualized contracts, which took a great deal of time to negotiate and fulfill, people interested in the forward trading of corn at the Board, for example, were asked to trade contracts that were identical in terms of quantity, quality, delivery month and terms, all as established by the exchange. The only thing left for traders to negotiate was price and the number of contracts.
These standardized forwards were essentially the first modern futures contracts. They were unlike other forwards in that they could only be traded at the exchange that created them, and only at certain designated times. They were also different from other forwards in that the bids, offers and negotiated prices of the trades were made public by the exchange. This practice established futures exchanges as venues for "price discovery" in U.S. markets.
In contrast to customized contracts, standardized futures contracts were easy to trade since all trades were simply re-negotiations of price, and they usually changed hands many times before expiration. People who wanted to make a profit based on a fortuitous price change, or alternatively, who wished to cut mounting losses as quickly as possible, could "offset" a futures contract before expiration by engaging in an opposite trade: buying a contract which they had previously sold (or "gone short"), or selling a contract which they had previously bought (or "gone long").
The usefulness of futures trading became apparent, and a number of other futures exchanges were established throughout the country in the decades that followed. The Chicago Butter and Egg Board was founded in 1898 and evolved into the Chicago Mercantile Exchange (CME) in 1919. Futures exchanges also opened in Milwaukee, New York, St. Louis, Kansas City, Minneapolis, San Francisco, Memphis, New Orleans and elsewhere. Chicago, however, became the most influential and predominant location for futures trading in the U.S.
In recent years, the commodities exchanges have experienced tremendous change by way of mergers and acquisitions. Most notably, the Chicago Mercantile Exchange has redefined itself as the Chicago Mercantile Exchange Group - a conglomeration of the Chicago Mercantile Exchange, the Chicago Board of Trade, and the New York Mercantile Exchange. Otherwise know as the "Merc," the Chicago Mercantile Exchange Group also controls the world's largest electronic futures exchange: Globex.
In addition to the Merc, there are many other commodity exchanges both domestically and around the globe. The industry is in a state of significant growth, and change is announced almost daily. As of this writing here are some other exchanges you may come across:

Kansas City Board of Trade

A commodity futures and options exchange that specializes in hard red winter wheat - the principal ingredient of bread.

Chicago Climate Exchange

A relative newcomer to the futures industry, the Chicago Climate Exchange is North America's only voluntary, legally binding greenhouse gas (GHG) reduction and trading system for emission sources and offset projects.

Intercontinental Exchange

An electronic based marketplace which trades futures and over-the-counter (OTC) energy and commodity contracts as well as derivative financial products. While the company's original focus was energy products, recent acquisitions have expanded its activity into the "soft" commodities, foreign exchange and equity index futures.

One Chicago

A subsidiary of the Chicago Mercantile Exchange, One Chicago is the home of single stock futures (SSF's), which are futures contracts with the underlying asset being stock.
Futures trading is also growing around the world with many notable exchanges including Canada's Montreal Exchange, Britain's London Metal Exchange, Eurex, and many more.

How futures are traded on exchanges

Trading at the futures exchange is conducted in two ways: an open outcry format and the electronic trading platform.

Open Outcry

The open outcry method consists of floor traders standing in a trading pit to call out orders, prices, and quantities of a particular commodity. Traders on the floor of the exchange wear different color jackets to indicate their position and affiliation. In addition, complex hand signals (called Arb) are used. These hand signals were first used in the 1970s. The pits are areas of the floor that are lowered to facilitate communication, sort of like a miniature amphitheater. The pits can be raised and lowered depending on trading volume. To an onlooker, the open outcry system can look chaotic and confusing, but in reality the system is a tried and true method of accurate and efficient trading.

Electronic Trading

Approximately 70 percent of total futures volume is conducted via electronic trading platforms. Fully electronic trading systems allow market participants to trade from booths at the exchange or while sitting in a home or office thousands of miles away.

Who are the players in the futures market?

You've already learned of two players in the futures industry: the regulators and the exchanges. Now we want to introduce the rest of the players in this industry and give you an idea of why they are there and what they hope to accomplish.
Generally speaking, the two primary players in the futures market are hedgers and speculators.

Hedger

The futures markets exist to facilitate the management of risk and are thus used extensively by hedgers - individuals or businesses who have exposure to the price of an agricultural commodity, currency, or interest rate, for instance, and take futures positions designed to mitigate those risks. This requires the hedger to take a futures position opposite to that of his or her position in the actual commodity or financial instrument. For example, a soybean farmer is at risk should the price of the commodity fall before he harvests and sells his crop. A short position in the futures market will return a profit when the price of soybeans declines, and the hedger's profit on the short futures position compensates for the loss on the physical commodity.

Speculator

Speculators are attracted to futures trading simply because they see the opportunity to profit from price swings in commodities and financial instruments. Speculators take advantage of the fact that the futures markets offer them access to price movements; the ability to offset their obligations prior to delivery; high leverage (low margin requirements); low transaction costs; and ease of assuming short as well as long positions. In pursuit of trading profits, speculators willingly assume the risk that hedgers wish to transfer. In this process, speculators provide the liquidity that assures low transaction costs and reliable price discovery, market characteristics which in turn make futures markets attractive to hedgers.
Besides these two broad classifications of players in the futures market, traders can also be categorized in a number of other ways. There are full-time professional traders and part-time traders; traders who trade on the trading floor or behind a computer screen. Each of these market participants plays an important role in making the markets efficient places to conduct business.

Public Traders

The vast majority of speculators are individuals trading off the floor with private funds. This diverse group is generally referred to as "retail" business. With the growing movement from trading on the floor to the computer screen, the retail customer is becoming a more important force in futures trading.

"Local" Traders

Perhaps the most visible and colorful speculator is the professional floor trader, or local, trading for his own account on the floor of an exchange. Locals are usually more interested in the market activity in the trading pit as opposed to the activity in the underlying market fundamentals. With the popularity of electronic trading sweeping the industry, a trader who operates in a fashion similar to a floor local has emerged-the "electronic local." The electronic local trades using the same method as the local except they do so through the Internet rather than in the trading pits of Chicago.

Proprietary Traders

Another major category of trader is the proprietary trader, who works off the floor for a professional trading firm. These "upstairs" traders are employees of large investment firms, commercial banks and trading houses typically located in major financial centers. This group has a number of different trading objectives. Some engage in speculative trading activity, profiting when the market moves in their direction. Such proprietary traders are compensated according to the profits they generate. Other proprietary traders manage risk, hedging or spreading between different markets-both cash and futures-in order to insulate their business from the risk of price fluctuation or exploiting differences and momentary inefficiencies in market-to-market pricing.

Market Makers

Market makers give liquidity to the market, constantly providing both a bid (expression to buy) and an offer (expression to sell). Increasingly important in electronic markets, market makers ensure that traders of all kinds can buy and sell whenever they want. Market makers often profit from the "spread," or the small difference between the bid and offer (or ask) prices.
You can see the futures market is made up of many different players working with different motivations for the common good of the market place. Each player has his or her own motivation and executes business in a strategy that best fits those individual objectives.

What are the Strategies?

With the many different players in this market, you may think that learning futures is going to be an insurmountable task. In reality, futures are very simple to understand. That's not to say it's easy to make money trading them, but futures are very straightforward. Speculators and hedgers alike trade two primary strategies - long or short. If you've ever traded options, you will understand that there may be variations to these strategies, but the root of any investment strategy in futures is to be long the market when prices are rising or to be short the market when prices are falling. You are either a buyer or a seller. It really is that simple.
This may seem obvious, but prices don't always go up. Sometimes they fall. With futures, it's just as easy to sell, or take a short position in a commodity as it is to buy, or take a long position. Unlike many cash-based investments, there are no special forms to fill out, no "uptick rule" and no higher financial requirements to meet when you take a short position. The requirements to sell short are exactly the same as to buy long. Either strategy is treated equally, and can be executed with equal ease.

How are prices determined?

Futures trading is based on the principle of forward pricing. While this may sound complicated, it really isn't. The concept has been around for hundreds of years. Let's explain it with an example:

Suppose you have a wheat farmer and a baker. For many years, the baker has bought the farmer's wheat and made delicious bread for the townsfolk. Their transaction always happens in September and they always set the price to the current market price of wheat (i.e. they don't bicker over price!).

This example describes a typical cash transaction involving no forward pricing. It would be the equivalent of you going to the grocery store and purchasing milk. Milk prices are different every time you go to the grocery store. When you purchase the milk you pay the current price. In the futures world, the going rate is called the cash or spot price.
Despite years of great business, when spring rolls around, both the baker and the farmer suffer a little stress. Both their incomes depend on where the price of wheat is come fall. Sometimes wheat is high, which is good for the farmer and sometimes it's low, which is good for the baker.
One spring they meet to see if they can work out an agreement that will help ease the stress and reduce some of the guesswork in their businesses. After talking for a few hours, they agree that it would be in their best interest to set a price now that would make it possible for both to make a profit this year.
In this example, the two parties have made an agreement, which in the futures market is called a forward contract, because of the fact that the agreement will be fulfilled in the future. It is from these types of forward contracts that the futures market was born.
The two strike an agreement for a future delivery of wheat at a specific price of $3.00 and for a specific delivery date of September 15th.
The terms are important elements of any futures contract. The two elements of this contract include price and time. In the financial world these are called the strike price or contract value and the expiration date. In this example, the terms are customized to the needs of the baker and the farmer. In the futures market the terms are fixed or standardized. You will learn more standardization in terms and contracts in Module 2.
Another valuable lesson we learn from this example is the motivations of the different players. In this case both parties in the contract are hedgers. The baker is a manufacturer or user (a term you have learned previously) and created a long hedge (he buys the wheat). Manufacturers use the futures market to lock in prices at favorable - low - rates. The farmer is a producer or dealer and created a short hedge (he sells the wheat). Producers also use the futures market to lock in favorable selling prices.
Still unsure about exactly how this contract is going to work, the baker calls up a friend of his in Chicago who is an expert in price forecasting analysis. With a little bit of anxiety over the whole deal, the baker explains what he has done in arranging a forward contract with his friend, the farmer. The analyst tells the baker that he did a great thing in working out this type of arrangement, and that if the baker wanted he would be willing to buy the contract for the wheat from him right now for $3.50 a bushel - and the baker could essentially walk away from the transaction and pocket $0.50 right now.
We have now introduced another party to the contract - the speculator! The speculator has an entirely different motive than the hedger. The analyst is an expert in forecasting future price levels. In this scenario, the speculator believes the prices will continue to increase over the summer and will be more than $3.50 before the contract expires.
The baker first hedged away his risk by entering the contract with the farmer. Now the value of the contract has grown in the futures, or secondary market. Notice that the cash market and the futures market are offering two different prices: the cash market is trading at $3.00 and the futures market is trading at $3.50. The futures are trading at a premium to cash.
One final thing we should understand is that by selling the contract to the speculator, the baker closed his position. In futures, you don't always have to take delivery of the underlying commodity to "get out" of your obligations. You simply turn around and perform an offsetting transaction that brings you back to a no obligation position. In this case the baker bought the contract from the farmer at $3.00 and then closed his position by selling the contract to the speculator for $3.50 making $0.50 on the deal.
A few weeks later, the price of wheat dropped significantly. The farmer, who was also concerned about taking care of his friend the baker, worried what if my wheat doesn't grow, how will I provide wheat to baker? He decides to call up a friend of his in Chicago who brokers wheat. He explains the deal to the broker. The broker congratulates him on an excellent deal and says that if he locked in prices right now, he could sell him a fall wheat contract for $2.50 a bushel plus a $500 finders fee. Eager to lock in enough wheat to give the baker, the farmer buys the contract.
A different type of speculator, the broker or dealer plays an important role in the futures industry by creating a market for the underlying commodity. The broker or dealer is essentially a matchmaker bringing together people who want to buy with people who want to sell. Brokers and dealers usually specialize in a particular commodity and derive their living by charging a commission or transaction fee on every transaction.
We should learn another lesson from this example. Just like the baker, the farmer closed his original contract by purchasing another contract. Remember the farmer essentially "sold" his contract to the baker - creating a short hedge. The farmer has an obligation to deliver wheat - wheat that has not grown yet. The farmer closed his short position to deliver wheat by purchasing a contract to receive wheat. In this example, the farmer makes money because he sold the rights to his wheat to the baker for $3.00 and bought the rights to other farmers' wheat for $2.50 making a profit of $0.50 minus the dealer's commission.
One afternoon the farmer and the baker met at the local cafe. The baker explained what he had done with his contract and with an approving laugh the farmer explained what he had done with his contract. Patting each other on the back the farmer put away his tractor and the baker turned off the oven and they enjoyed a nice afternoon at the golf course.
Both the farmer and the baker were able to deflect risk off to third parties and in the process lock in profits that would make their businesses run smoother.
As it turned out, it was an exceptionally stormy spring and the wheat crop was damaged. As a result of the decreased supply of wheat, the cash price for wheat shot up to $4.00 a bushel.
So, what happened to the broker, the speculator and the other farmer?
The broker already made his money. Being compensated for every transaction, the broker in this example ended up making $500. The broker makes money on the number of transactions that run through the brokerage. It really doesn't matter to the broker whether prices go up or down. He is buying and selling inventory all the way up the price scale and all the way down - making $500 a pop!
The speculator in this circumstance made out fine as well! For a while the speculator suffered some heat as the cash market dropped to $2.50 a bushel. But thanks to his trading plan, knowledge and expertise in forecasting price and with the discipline of a Gregorian Monk, the speculator ended up making money in the end.
The tragedy of this story was the other farmer - who really didn't fare so poorly either. It ends up that at the end of the year it cost him $2.00 a bushel to produce the wheat. Since he sold the wheat contracts for $2.50 he ended up making $0.50 on each bushel he sold. Where the tragedy occurs is in the "should of, would of, could of" dreams that keep haunting him at night. But then again, everybody (the baker, the dealer, the first farmer, the speculator) has those dreams and there's always next year!
A couple of points we need to make sure we understand:

Cash Prices and Supply and Demand

Cash prices respond to the present supply and demand for the actual commodity. If there is a shortage of the underlying commodity, its price will be bid up. If there is a surplus of the commodity, the cash price will fall.

Cash prices and Futures Prices

Futures prices respond to changes in the cash price. The futures price most affected by a change in the cash price is that of the nearest expiration date. Other futures prices will include a small premium to the cash price.

Futures Prices and Traders' Expectations

Futures prices are also valued by traders' expectations. The mere threat of drought, crop damage, labor strike, hurricane, etc. can send futures prices up long before the actual event materializes.

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Analysis PT Tambang BatuBara Bukit Asam(PTBA)

Technical analysis of shares of PT Bukit Asam coal mine

Cup and Handle

This formation was first discovered by William O'Neil, a famous figure in the investment world, this pattern forms as a cup that has handles. Cup and Handle is a Bullish Continuation Patterns, a pattern that only a bullish signal (which will continue the uptrend started). Formation on Daily charts This generally occurs within a period of six weeks to eight months, and certainly will be longer when using the Weekly charts.  

 

How to Process A Cup Formation And Handle The Founding Ideal?

Uptrend that started this pattern starting from Point A to Point B that after a decline in prices, accompanied by trendline penetration. Prices continue to gradually depressed as the basis of the cup. Then gradually the price moves up and tried to resistance level at the previous peak (ie: peak B), thus forming a cup or like the letter U. Although not always the case, in general the lips the cup on the left and right have high levels of (almost) the same.
Price movements when attempting to re-stress resistance level due to selling pressure in the area (C), will cause the corrected price down or slightly sideways consolidation, forming the handle to the right of the cup. In this consolidation phase formation that occurs potentially similar to the pattern Flags or Pennants. The smaller the correction that occurred in the value of the stock price at the formation stage of the handle formation, the signal indicating an increasingly bullish.  

If the price movement in its formative stages when the handle instead of sideways, but declined, the decline should not exceed the limit "mid-altitude cup". In general, the formation of the handle is formed within one week to four weeks.
As a validation of Cup and Handle pattern, the closing price must be able to penetrate into the line of resistance. Then the target can be determined based on the projection "height cup" to the breakout point from the line of resistance. Mnegenai issues pullback after permeation resistance to this pattern, according to statistics reached a high enough rate, that is 70 percen. 

 

The ideal volume of the Cup and Handle

 Volume thinning should accompany the decline in price from point B to the bottom of the cup. On average, the thinnest volume occurs when price movements are based on the cup, then increased when accompanied munuju rally point C, then thinning again as consolidation or correction in its formative stage handle. Breakout should be accompanied by a surge in volume, and if there pullback must be accompanied by a thin volume, and then increases when prices began to rally back.  

 

Summary:

In Figure above cup and handle pattern is formed in the shares of PT Tambang Coal Bukit Asam (PTBA), dimanan uptrend that started from point A to point B.
The price gradually dropped form the bottom of the cup (Support) and the price back up to point C (resistance), then re-corrected price from point C or less half a cup body, called the Handle, until this analysis is to make the price resistance level, Breakout occurs we expect in the next few days at a price of 18,850 (Bullish Break), and the projected target price will reach levels of 20250-20300, while for entry into or purchase in the short run when prices broke through the 18,100 resistance, we would buy at the price of 18,150 -18,300. While for Cut losses at the level of support at the 17,650 price, so we'll go out when the price is below the support price which is at 17600-17550. 

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WAR "CYBER"

Google Investigate Employee

SHANGHAI, MONDAY-Google was to investigate whether there are employees who may help facilitate cyber attacks and make this company as a victim.
Thus disclosed two sources close to the matter in shanghai, Monday (18 / 1).
Google, the search engine of the most popular in the world, said last week will likely withdraw from the world's largest Internet market after reporting they were attacked and stolen intellectual property.
The source said the attack aimed at the people who have access to specific parts of the Google network may have been facilitated by the people inside.
"We do not comment on rumors and speculation. This investigation is still going on and we do not want to comment further," said a Google spokesman.

Advanced

Security analysts say that the software used to attack Google is a modification of the so-called Trojan hydrag. Trojan is a type of computer virus. Once entered into the computer, the Trojan can provide opportunities to people who are not entitled to access the data.
Local media quoting from a source claimed that some Google employees are nationals of China had denied her access to the internal network after 13 January. At that time, several pagawai closed and several others scattered in different Google offices.
Google still wants to negotiate with China before deciding anything. They will contact the government of China in the next few days. (REUTERS)

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Pope shooter Released

Pope shooter Release

ANKARA MONDAY-Mehmet Ali Ağca, Turkish citizens who tried to kill Pope John Paul II about 30 years ago, breathing air free from jail Turkey, Monday (18 / 1). Liberation was once kept a mystery about who figures or parties responsible for the action behind the assassination attempt on the leader of Roman Catholics this.
Ali Ağca found guilty and curled for 19 years in prison Italy, before finally getting forgiveness from the pope in 2000. Ali Ağca diektradisi to the state penitentiary Turkish origin, because the other crimes which he did in 1979, including the murder of a newspaper editor.
When released from prison, 52-year-old man was issued a written statement memlalui lawyer. He writes, "I declare the end of the world soon. The whole world will be destroyed in this century. Every human being will die in this century". Ali said the letter signed by "Christ is Mehmet Ali Ağca Eternal".

From the writing, various circles to say, Ali Ağca allegedly undergoing psychiatric disorders. After his release, transfer Ağca military hospital to undergo medical examination, whether he deserves to get psychiatric services. His lawyer wishing Ali was not experiencing psychological problems.
What was the motive Ağca shot and wounded Pope John Paul II at the Vatican in 1981 remains a mystery. Some people believe he worked for the Soviet communist doctrine was developed in eastern Europe. That the Polish Pope, who later died on 2 April 2005, was strongly opposed communism. 

Last week, Ali Ağca said he would answer all questions in an attack will happen in the coming weeks. Including the question whether the Soviet and Bulgarian experiment was reversed action to kill the Pope. Ali Ağca was born on 9 January 1958 from a poor family in Turkey. As a teenager, he was involved in crime and smuggling between Turkey and Bulgaria. Could become a member of the group of right-wing hardliners, Gray Wolves, when he was a teenager. In 1979, he killed Abdi Ipekci, a journalist. Top journalist murder case, he was sentenced to life imprisonment, but he was released after six months in jail and fled to Bulgaria. On 13 May 1981, Ağca shot Pope John Paul II several times when the Pope was driving a Jeep pickup at the beginning of Mass weekly at St. Peter's square. Ali was immediately arrested, the pope survived despite suffering severe injuries and could be hospitalized for several weeks. Three O after the shooting, the pope forgave Ağca through live broadcast on the radio from the hospital bed. In July 1981, an Italian court declared Ağca guilty of trying to kill the Pope and was sentenced to life imprisonment. In December 1983. Pope to visit her in prison Rome and speak privately. The contents of the conversation they have never opened to the public. In 2000, Ağca the extradition to Turkey to lead a life sentence for murder of journalist in 1979. (REUTERS).

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